December 18, 2018

Senator Warren Calls on CFPB Inspector General to Investigate Wasteful, Harmful Decision to Change Agency's Name

Letter follows report that name change would cost the agency up to $19 million and cost regulated companies $300 million.

Letter follows report that name change would cost the agency up to $19 million and cost regulated companies $300 million.
Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent a letter to Mark Bialek, the Inspector General (IG) of the Board of Governors of the Federal Reserve and the Consumer Financial Protection Bureau (CFPB), to request an investigation of former Interim CFPB Director Mick Mulvaney's attempt to change the agency's name, at the cost of millions of dollars for consumers, banks, and other regulated entities.
"The failure to justify the name change, combined with the failure to follow basic procedural rules, the wasteful expenditures, and the confusing implementation suggest a serious breakdown in the policy-making process at the CFPB," Senator Warren wrote.
In March 2018, the CFPB announced that it would begin using a new seal that identified the agency as the Bureau of Consumer Financial Protection (BCFP). Soon after, Mulvaney indicated he intended to change the agency's name.
Public reports show that the name change would cost the CFPB itself between $9 million and $19 million and would also cost banks, lenders and other financial services firms subject to CFPB supervision roughly $300 million total. This cost would have a significant effect on the agency's budget, taking funding that could otherwise benefit consumers.
Senator Warren also expressed concern that the CFPB did not take the appropriate steps to change its name, including formally amending several rules it enforces using the process required by the Administrative Procedures Act and following Small Business Regulatory Enforcement Fairness Act (SBREFA) procedures.
The senator notes that the name change could also confuse consumers, preventing them from filing complaints or seeking help. Currently, the CFPB appears to be using both names.
"In that environment, a consumer would be hard-pressed to know whether a remediation check they receive with the old CFPB seal is a scam or whether they have the right number if they call the complaint hotline and an operator from the BCFP answers the phone," the senator wrote.
The senator requested that the CFPB IG launch an investigation into the name change to determine how the decision was made; if the agency abided by formal processes; if a cost-benefit analysis was undertaken; the plans and benefits of the name change; how the agency plans to absorb the cost; and if Mulvaney sought direction from the agency's general counsel.